Shares of grocer Sobeys Inc.’s parent fell almost 10 per cent to $19.53 in early afternoon trading Wednesday as its troubles in Western Canada deepened and showed signs of spreading further afield amid the company posting close to a $1-billion loss in its fourth quarter.

“Clearly, a very disappointing quarter for our organization,” Marc Poulin, chief executive officer of both parent Empire Co. Ltd. and Sobeys, told analysts Wednesday after releasing the results late Tuesday.

As a result of the problems, Empire took another unexpected hit in the quarter – a $1.3-billion impairment charge in addition to its $1.59-billion writedown in its third quarter on the value of its western business, mainly its Safeway chain.

Sobeys’ results “further reveal the depth of the challenges facing the company,” said Mark Petrie, retail analyst at CIBC World Markets.” He said the grocer failed to meet his firm’s expectations “on all metrics, culminating in another large asset impairment.”

Peter Sklar, retail analyst at BMO Nesbitt Burns, said Sobeys’ quarterly results and other revelations are “disappointing,” including the unexpected latest impairment charge which brings charges for this year to $3-billion and “amounts to about half the purchase price of Canada Safeway.”

The country’s second-largest grocer was blindsided by consumers’ shift to bargain shopping, especially in oil-hit Alberta and Saskatchewan, leaving the retailer in the lurch without a discount chain except its FreshCo in Ontario while rivals beef up their no-frills operations.

To compound matters, Sobeys’ $5.8-billion takeover in late 2013 of Safeway Canada, which operates in Western Canada, has gone awry, with a series of missteps in produce procurement and private label switches amid too-high prices that have kept shoppers away.

The Stellarton, N.S.-based retailer competes with discount chains of archrival Loblaw Cos. Ltd., the country’s largest grocer, as well as the low-cost Wal-Mart Canada Corp. – which has expanded its food offerings – and Costco Canada, among others.

Sobeys has moved to lower prices but the initiatives have not been enough to turn the tide.

To make matters worse, “in the fourth quarter we saw early evidence of a softening sales trend in other regions of the country,” Mr. Poulin said.

His team is racing to slash prices and costs as it streamlines its supply chain and renovates key stores, he said. But “the stabilization and eventual return to a successful level of growth in our business is clearly going to take time,” he warned, without being more specific.

“We know the overall market continues to experience a significant shift in customer mindset, which only serves to reinforce the approach we are taking in making significant structural changes in our business,” Mr. Poulin said.

He said the overall industry is feeling the weakness in the economy and not just in the oil-producing markets. “That being said, we are challenged by maybe – more challenged – than other players, so we will acknowledge our own weaknesses.”

And he said the prospect of Sobeys expanding its discount FreshCo beyond Ontario “is top of mind for management ... It’s a concept we’re quite pleased with.”

The company reported a fourth-quarter loss of $942.6-million or $3.47 a share compared with a profit of $55.4-million or 20 cents a share a year earlier. Sales rose to $6.3-billion from $5.8-billion.

Its fourth-quarter results benefited from an extra week in the latest period compared with the previous year, accounting for an estimated $461.2-million in additional sales and $7.4-million to the bottom line.

Sobeys’ same-store sales at outlets open a year or more – a key retail measure – fell 1.8 per cent in the fourth quarter; excluding the negative effect of fuel sales and the Western retailing business, same-store sales would have increased 0.2 per cent, the company said.

Adjusted fourth-quarter profit, net of its non-controlling interest, tumbled 30 per cent to $95.3-million or 35 cents a share from $136.7-million or 49 cents a share a year ago.

The company declared a dividend of $0.1025 a share, up 2.5 per cent.